SmileDirectClub Inc announced it has reached an agreement with the Office of District of Columbia Attorney General (AG) Brian L. Schwalb, to resolve the litigation brought by the AG’s Office against SmileDirectClub.
In the lawsuit filed in December 2022, the DC Attorney General alleged that the company’s refund policy required customers to sign a non-disclosure agreement, or NDA, in exchange for a refund after the first 30 days. The NDA allegedly prohibited customers from posting negative reviews and prevented customers from contacting government regulator’s or law enforcement to receive a refund. Those who violated the terms of the NDA could be responsible for $10,000 in damages per violation, paid to the company, according to the lawsuit.
The DC Attorney General’s lawsuit alleged that SmileDirectClub’s practices violated the Consumer Protection Procedures Act.
“SmileDirectClub has always believed transparency is key to building trust with its customers, and that’s why we were the first company in the teeth straightening industry to give consumers the pricing transparency and accessibility they deserve,” Chief Legal Officer Susan Greenspon Rammelt said. “For too long there has been a misinformation campaign claiming SmileDirectClub stifles negative consumer feedback through the use of non-disclosure agreements. While we were disappointed this misinformation caused the District of Columbia to file its complaint, we are pleased to set the record straight and work with the District of Columbia’s Office of the Attorney General in its efforts to create new policy for the industry and increase customer transparency.”
In a press release from SmileDirectClub, the company says it does not require customers to execute a release or any form of non-disclosure before or during treatment or in order for a customer to retain a prorated refund. When a customer seeks a refund outside of the Lifetime Smile Guarantee, that form of release is modeled on a release form historically used in the industry. According to the company, given the infrequent use of the general release form (GRF) by SmileDirectClub over the years and the ongoing misinformation campaign, the company already had plans to tailor the non-disclosure provision more narrowly in its GRF. The company says this litigation gave it an opportunity to address both that campaign and the lawsuit at the same time.
“We are proud of our products and services, and customer satisfaction has been and will continue to be our North Star,” Greenspon Rammelt said. “As the District of Columbia enforces its newly developing policy to limit the use of non-disclosure provisions, even in general forms of release, across the dental industry, we encourage the rest of the orthodontic industry to follow our example as a leader in consumer transparency and embrace honest reviews and feedback from consumers in digital forums.”
